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  • Possibility to obtain liquidity assistance from the Industrial Development Agency
Article:

Possibility to obtain liquidity assistance from the Industrial Development Agency

20 April 2020

Dorota Szlachetko-Reiter, Managing Partner, Legal Adviser |

As part of the announced extension of the so-called "anti-crisis shield", the Sejm adopted the Act of 16 April 2020 on special support instruments in connection with the spread of the SARS-CoV2 virus, Journal of Laws of 2020, item 695 (hereinafter: "Special Purpose Act”).

The Special Purpose Act introduces into the aid system for entrepreneurs the possibility of obtaining support from the Industrial Development Agency (Agencja Rozwoju Przemysłu) or its subsidiary in order to provide the entrepreneur with financial liquidity for the duration of an epidemic hazard or state of epidemic and for a period of 12 months following its cancellation, until the negative economic effects for entrepreneurs cease.

Who is eligible for support?

Entitled to receive support are entrepreneurs with whom:

1. there has been a decrease in economic turnover due to coronavirus, understood as a decrease in sales of goods or services, in terms of quantity or value:

b.1. not less than 15%, calculated as the ratio of the total turnover during any given 2 consecutive calendar months falling within the period after 1 January 2020 to the day preceding the date of the application referred to in paragraph 1, compared to the total turnover during the same 2 consecutive calendar months of the previous year; a month shall also be deemed to be 30 consecutive calendar days where the two-month comparison period begins during a calendar month, that is to say, a day other than the first day of the calendar month concerned, or

c.2. not less than 25%, calculated as the ratio of the turnover of any given calendar month after 1 January 2020 to the day preceding the date of submission of the application referred to in sub-paragraph 1, compared to the turnover of the previous month; a month shall also be deemed to be 30 consecutive calendar days where the comparative period starts during a calendar month, that is, a day other than the first day of that calendar month.

2. no grounds for bankruptcy and no restructuring proceedings were opened. If an application for bankruptcy or restructuring has been filed with respect to the entrepreneur, the procedure for granting support shall be suspended until the application is finally considered.

What are the forms of support?

Support from the Industrial Development Agency may be provided in the form of:

1.        loan;

2.        a guarantee;

3.        guarantees;

4.        leasing;

5.        other instruments related to financing of business activity.

 

The above support is granted on market conditions.

 

It is worth noting that the support may also be granted in the form of other repayable financial debt instruments, if the parties to the agreement agree so.

The amount and type of support depend on the actual financial consequences that the entrepreneur has incurred as a result of announcing a state of epidemic threat or a state of epidemic, as well as the scale of conducted activity.

It should also be noted that according to the Special Purpose Act, obtaining support is possible if the entrepreneur secures the return of obtained funds in an appropriate manner.

On what basis is support granted?

In order to obtain support from the Industrial Development Agency, an entrepreneur must submit an application. Then, an agreement is concluded between the entrepreneur and the Industrial Development Agency on the basis of which support is granted.

Current support from the Industrial Development Agency

ARP S.A. (Industrial Development Agency) has already announced on its website the "Anti-Crisis Shield" offer containing an operating lease with a grace period, a working capital loan to cover the deficit in working capital and a working capital loan to finance the payment of salaries in the SME sector.

Currently, the offer is available for entrepreneurs meeting the following conditions:

1.    the status of the company in the area of small and medium-sized enterprises,

2.    to operate for a minimum of 12 months,

3.    the applicant's income for the last financial period amounted to at least PLN 4 million,

4.    end of the last financial year with a positive EBIDTA (operating result + depreciation)

Due to the fact that the provisions of the Special Purpose Act entitle ARP S.A. and its subsidiaries to provide support in a much wider scope than that specified in the offer of ARP S.A. announced on its website, this offer should be subject to changes.

 

If you need more information and help with these formalities, we encourage you to contact our specialist in this area:

Dorota Szlachetko-Reiter

[email protected]